Home > Publications . Search All . Browse All . Country . Browse PSC Pubs . PSC Report Series

PSC In The News

RSS Feed icon

Cheng finds marriage may not be best career option for women

Lam discusses youth population dynamics and economics in sub-Saharan Africa

Work by Bailey and Dynarski cited in NYT piece on income inequality

Highlights

Jeff Morenoff makes Reuters' Highly Cited Researchers list for 2014

Susan Murphy named Distinguished University Professor

Sarah Burgard and former PSC trainee Jennifer Ailshire win ASA award for paper

James Jackson to be appointed to NSF's National Science Board

Next Brown Bag


PSC Brown Bags will return in the fall

What does tax aggressiveness signal? Evidence from stock price reactions to news about tax shelter involvement

Archived Abstract of Former PSC Researcher

Hanlon, Michelle, and Joel Slemrod. 2009. "What does tax aggressiveness signal? Evidence from stock price reactions to news about tax shelter involvement." Journal of Public Economics, 93(1-2): 126-141.

We study the stock price reaction to news about corporate tax aggressiveness. We find that, on average, a company's stock price declines when there is news about its involvement in tax shelters. We find some limited evidence for cross-sectional variation in the reaction. For example, the reaction is more negative for firms in the retail sector, suggesting that part of the reaction may be a consumer/taxpayer backlash. In addition, the reaction is less negative for firms that are viewed to be generally less tax aggressive, as proxied by the firm's cash effective tax rate. We interpret this as being consistent with the market reacting positively to evidence that a firm is trying to reduce taxes when their financial reports would lead one to believe the firm is not tax aggressive. (c) 2008 Elsevier B.V. All rights reserved.

DOI:10.1016/j.jpubeco.2008.09.004 (Full Text)

Country of focus: United States.

Browse | Search : All Pubs | Next